Yu Xie

The rise of the digital enterprise has induced new challenges for shaping competitive ethics and advancing sustainable business practices. Grounded in industrial organization theory, institutional ethics theory and stakeholder theory, we construct an integrated framework to examine the impact of competitive ethics review on carbon emissions of digital enterprises. The results indicate that competitive ethics review can significantly reduce carbon emissions of digital enterprises, with the effect intensifying over time. We demonstrate that external regulatory pressure and internal corporate ethic motivation positively moderate this green benefit, and that pressure and ethics exhibit complementary effects. Additionally, enterprises with high algorithmic ethics achieved more prominent emission reduction effects. Mechanism analyses reveal that these reductions are driven by decreased market segmentation, reduced acquisition activity, and enhanced green innovation. By examining supply chain partners’ carbon emissions changes, we reveal that competitive ethics review promotes supply chain sustainability by shifting regulatory pressure upstream, compelling suppliers to incorporate climate ethics into their business practices. Overall, our findings highlight the critical role of competitive ethics in promoting corporate sustainability and offer practical insights for regulators and corporate managers navigating the intersection of fair competition and sustainable business practices.